Domain firm looks to competition for cash

The nonprofit Internet Corporation for Assigned Names and Numbers is hoping that new competition in the market for ".com" addresses will bring it a much-needed infusion of cash.

January 2, 20024:43 PM PST

The group responsible for turning over administration of the
Internet to private industry is hoping that new competition in the market
for ".com" addresses will bring a much-needed infusion of cash into its
coffers.

To date, the nonprofit Internet Corporation
for Assigned Names and Numbers has raised about $700,000, said interim
chief executive Mike Roberts, who added that not all of it has been
collected yet. That figure, which includes about $500,000 raised by the Global Internet Project, is less than half
of what ICANN expected to need during its first eight months of operation.

The GIP is a group whose 13 members include AT&T Worldnet, Netscape Communications, and other companies whose businesses are based around the Internet. It has raised funds by soliciting them from its members.

But Roberts shrugged off the deficit, saying that a plan to bring dozens of
new registrars on board will funnel more than $5 million to his organization.

Until recently, Network
Solutions held sole authority to register domain names ending in
".com," ".net," and ".org," which grace between 50 percent and 75 percent
of the world's Internet addresses. Last year, the Commerce Department appointed ICANN to open
up competition and to oversee the privatization of the Net's daily upkeep.

Last month, ICANN appointed five registrars to begin selling domain names during a "test bed" phase. The group is expected to authorize dozens more by the end of the summer. Under
terms put in place by the Commerce Department, ICANN will charge each registrar $5,000 per year and $1 per year for each domain name registered.

Under current demand for addresses, the fees are expected to generate more
than $5.9 million in revenues for its 1999-2000 fiscal year, well over the
$4.2 million in expenses ICANN expects to face, according to ICANN's proposed budget.

The budget also has provisions allowing for deficits and surpluses to be
rolled over to the following fiscal year. "If there's a negative number
[at the end of June], it just carries forward to the next budget,"
Roberts said.

Roberts acknowledged that funds from registrars, scheduled to begin being
paid in July, might be delayed, but said ICANN would continue operating
anyway. "I would expect the same people who have supported us up to now
would continue to support us," he said. "The business community has a big
stake in ICANN succeeding and the Internet continuing to scale."

Now that ICANN oversees administration of the Internet, companies whose bottom line depends on the Net running efficiently are likely to take a keen interest in the nonprofit.

ICANN's expenses include salaries for its own staff, employees at the Internet Assigned Numbers Authority,
technical upkeep, and travel costs. Previously, many of these expenses
were covered by the government, which has been trying to get out of its
role of administering the Net.

"All of those administrative functions are vital to the operation of the
Internet," said Vint Cerf, an early architect of the Net who now is an
executive at MCI WorldCom. Funding for ICANN "is just one natural step in
the direction of extracting the U.S. government from the support function
and placing the it where it belongs."